A lack of confidence in the housing sector, a massive amount of unsold inventory, and the credit crunch continue to decimate big builders. Centex Corp. is no exception, reporting a hefty net loss, $644 million, for the second quarter. The Dallas-based builder released results from the period ending Sept. 30 shortly after the stock market closed on Tuesday.
"Market conditions were extremely challenging during the quarter, reflecting the serious disruptions in the credit and mortgage markets that occurred during that period," said Tim Eller, Centex Corp. chairman and CEO, in a released statement.
"In response, we meaningfully reduced prices in order to improve affordability for our home buyers. These actions were consistent with our continued focus on selling homes and generating cash as we structure for profitability," Eller added.
Despite a reduction in prices, (and $983 million in impairments and write-offs) the builder saw a significant drop in closings and orders; 7,350 units closed-a 14 percent decrease from the second quarter of 2006-and orders decreased 13 percent. Overall, the company's home building unit reported a $953 million loss.
Centex's home building unit appeared to be hit the hardest in the Southeast with closings down 26 percent and revenue sliding 32 percent.
Centex, ranked No. 4 in the 2006 BUILDER 100, will hold a conference call on Wednesday with more details on their second quarter earnings.
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